Charter Pitches Buildout Bonus of TWC Deal

Top Charter executives including COO John Bickham and CFO Christopher Winfrey met with Federal Communications Commission officials during the week of Feb 8 to make the case that the Charter-Time Warner Cable merger will mean faster residential broadband buildouts and upgrades. New Street Research says it believes chances of outright rejection of the deal are low as the FCC staffers hone in on possible conditions, like broadband buildouts, citing the recent meeting as one example.

During the Feb. 11 meeting, according to an ex parte document, the executives argued that deal synergies means improving "investment payback horizons," which means more residential lines and faster upgrades in the first four years following approval of the deal than if there were no merger. Also representing Charter was Michael Katz, Sarin Chair Professor of Economics at the Berkeley Haas School of Business, who also argued that the deal would improve the buildout "metrics." Among the FCC staffers at the meeting were Media Bureau chief Bill Lake and general counsel Jonathan Sallet. "Both the FCC staff and the Charter team had a full complement of heavy hitters to discuss the economics of building out new residential line extensions and accelerating the upgrade of existing lines," said New Street of the meeting. "If the issue of residential line extensions was not central to the FCC’s current thinking, we doubt there would have been such a meeting focused on the topic."